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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

Sex, Oil, and the Ruble

by | January 28th, 2015 | 12:32 pm

In the last few weeks, a start-up called Russian Zen has become the most visited internet site in Moscow. No, it isn’t a spiritual site. Quite the contrary. On a background of sparsely-clad women and soothing tantric music, three numbers flash on the screen: the real-time ruble to dollar exchange rate, the ruble to euro […]

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China and India: Who Will Win the Growth Competition?

by and Jan Zilinsky | January 28th, 2015 | 08:51 am

India’s economic promise is at the forefront of public interest, with President Obama’s visit a few days ago. Will India’s economy finally grow faster than China’s? According to the January 2015 update of the International Monetary Fund’s World Economic Outlook, the growth rate of India’s real GDP will overtake China’s in 2016, sooner than previously […]

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Greece Has Chosen, but It Doesn’t Get to Decide by Itself

by | January 26th, 2015 | 05:57 pm

The radical leftist party Syriza won the election in Greece on Sunday with 36 percent of the vote, propelled by a campaign demanding an end to tough austerity measures imposed from on high in return for its rescue from insolvency. Together with the Independent Greeks party (ANEL), Syriza is now poised to form a Greek […]

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Is Foreign Ownership of Banks Problematic for Eastern Europe?

by | January 26th, 2015 | 10:23 am

Last week’s request by two Greek banks for a €5 billion emergency assistance from the European Central Bank rang alarm bells. Not just in Greece, where the economy has barely gotten off the ground after six consecutive years of falling GDP, but also across several Eastern European countries, where Greek banks have a significant share […]

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How Long Will the Global Oil Glut Last?

by | January 22nd, 2015 | 10:14 am

The decline in oil prices to less than $50 per barrel should not be a surprise. The surprise is how long oil prices stayed above $100 per barrel when supply and demand fundamentals could no longer support such a price. Given the supply outlook, oil prices will likely remain below $50 per barrel for some […]

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Bulgaria: Slayer of Russian Energy Projects

by | January 21st, 2015 | 01:59 pm

In the past three years, Bulgaria has been slaying large Russian energy projects at the pace of one a year. In 2012, it was the Belene nuclear power plant—started in the distant 1988 and dragging along until the Borisov government, in which I was minister of finance and deputy prime minister, killed it off. In […]

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The ECB’s Coming New Stance on QE

by | January 20th, 2015 | 01:51 pm

For months I have argued that the European Central Bank (ECB) is not likely to move quickly toward new monetary stimulus, including the purchase of sovereign bonds. I have now shifted my expectations. I believe that at its next meeting, the ECB will likely commence a broad based asset purchase program, including euro area sovereign […]

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2015 Outlook for FDI in the US: Two Key Sources of Growth Are China and Japan

by and Lindsay Oldenski | January 20th, 2015 | 09:04 am

FDI by Chinese firms in the United States Chinese investment in the United States has been growing in recent years, concentrated in manufacturing, electrical equipment, information technology (IT), chemicals, and extractive industries. But total foreign direct investment (FDI) by Chinese firms in the United States is still much lower than what would be expected based […]

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The Effects of a Wage Increase by Large Corporations on the Macroeconomy

by | January 17th, 2015 | 12:00 pm

The Peterson Institute for International Economics has for some years undertaken research on inequality and inclusive capitalism, partially supported by a series of grants from the ERANDA Foundation. Last month, Aetna informed the Institute of its plan to raise the wages of its lower-paid workers. Following Aetna’s announcement of its intention, the Institute is posting […]

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Two Cheers for the Swiss National Bank

by | January 16th, 2015 | 12:45 pm

The financial world is hyperventilating over the Swiss National Bank’s surprise announcement that it is abandoning its policy of pegging the Swiss franc to the depreciating euro. Two cheers for Thomas Jordan and the Swiss National Bank (SNB).  It was the right policy move and it reminded financial markets that the job of central banks […]

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